Aviation Strategy

Written evidence from ADS (AS 74)

About ADS

ADS is the trade organisation advancing the UK Aerospace, Defence, and Security industries with Farnborough International Limited as a wholly-owned subsidiary. ADS encompasses the British Aviation Group (BAG) and jointly sponsors, with Intellect, UKspace. ADS is also a member of the Sustainable Aviation coalition of airports, airlines and aerospace manufacturers.

ADS was formed on 1 October 2009 from the merger of the Society of British Aerospace Companies (SBAC), the Defence Manufacturers Association (DMA) and the Association of Police and Public Security Suppliers (APPSS). ADS comprises around 900 member companies within the industries it represents. Together with its regional partners, ADS represents over 2,600 companies across the UK supply chain.

ADS welcomes the opportunity to respond to the consultation by the House of Commons Transport Select Committee. Representing the aerospace supply chain, the ADS submission focuses on the many technological improvements that manufacturers have made, thus reducing the environmental footprint of aviation.

4.1 The Aviation sector is vital to the UK economy bringing financial benefits to the UK and providing high skilled employment and connections to growing markets.

1.1 Aerospace, including both fixed wing and rotary wing aircraft, is one of the UK’s big success stories and a significant contributor to the UK economy. The UK aerospace manufacturing sector is the second largest in the world (17% market share), and one of the UK’s few world-class manufacturing industries, worth over £24bn to the UK, of which 75% is exported world-wide. The sector is high value and highly skilled, employing nearly 100,000 directly and supporting a workforce of around 360,000, plus another 46,000 overseas.

1.2 An important contribution from the industry is in the regionalisation of commercial aviation, generating employment in many regional areas – a good example is Bombardier in Belfast, who provide employment to around 5,000 employees, generating almost 10% of Northern Ireland’s manufacturing exports.

1.3 Connectivity to emerging markets and those with growth levels greater than the UK, such as Brazil, the Russian Federation, India and China (the BRIC countries) are vital for the future prosperity and welfare of UK plc. UK Aerospace has a crucial role and is, as the Prime Minister has noted "a powerhouse in the UK economy". In this respect, the UK is already losing out to its European neighbours who have latched on to the vital role that aviation plays. A recent report by Frontier Economics prepared for Heathrow, [1] noted that companies do 20 times the amount of business with countries connected by air, than those that are not.

4.2 The Aviation sector takes its environmental responsibilities seriously, and has consistently demonstrated this in the past and present, projecting that continuous improvement is the norm for this industry in for the future.

2.1 Technology improvements and advances in operations have improved the fuel efficiency of aircraft significantly – the Airbus A380 burns about 17% less fuel per seat and the new Bombardier CSeries aircraft will travel 100 passenger km on 2.3 litres of fuel. A Toyota Prius travels the same distance on 4.3 litres. Operationally, the ‘Perfect Flight’ operating from Heathrow to Edinburgh, as part of the Sustainable Aviation initiative, demonstrated that around 12% of fuel burn/CO2 emissions could be saved if inefficiencies in airspace design and management could be improved.

2.2 Passenger numbers are expected to more than double by 2050 and air freight activity, vital to the UK's trade with emerging markets, is expected to increase more than seven fold. However, the industry, under the Sustainable Aviation banner, has produced a ‘CO2 Roadmap’ showing how UK aviation could accommodate significant growth to 2050 without a substantial increase in absolute CO2 emissions and support the reduction of net CO2 emissions to 50% of 2005 levels through internationally agreed carbon trading. [2]

2.3 Local air quality impact at airports is mainly caused by surface traffic, as the Government’s Project for the Sustainable Development of Heathrow (PSDH) study demonstrated and where advances in aircraft engine technology are reducing aero-engine NOx emissions even further. It should be noted that although EU nitrogen dioxide limits are breached at a few areas around this major hub airport, they must not be allowed to deflect the Government away from the real issues that exist in major conurbations, such as central London where the levels are substantially higher and still rising.

2.4 Noise contours around major UK airports have reduced substantially and aircraft today are significantly quieter than they were in the past. For example, the noise performance of aircraft such as the new 550 seat Airbus A380 are setting new paradigms for noise performance – it’s Quota Count (QC) 0.5 classification on arrival being equal to that of the 150 seat Boeing 737, and a quarter of that of the Boeing 747-400 it replaces.

2.5 Despite the huge technological innovations that have already been made, the industry is not resting on its laurels and is investing heavily in the future. R&D expenditure by the UK aerospace manufacturing sector was maintained at £1.77bn per year in 2010, and new concepts such as those highlighted in ‘The future by Airbus’ demonstrates that the industry is not frightened of forward thinking. [3] Government support through the Aerospace Growth Partnership (AGP) is crucial for the industry to retain world leadership in this area. ADS looks for cross-party support for the AGP so that UK Aerospace is able to continue to deliver for the UK economy.

4.3 Aviation does need Government to step up to its responsibilities regarding this sector, providing the right political framework to allow the Aviation sector to grow in a sustainable way, integrated with other transport modes and industries.

3.1 It must be understood that more than any other industry, Aviation operates in a global market and, as such, needs global solutions to avoid market distortions that would prejudice against the UK industry.

3.2 ADS supports emissions trading on a global basis where the most cost-effective CO2 mitigation opportunities may be identified and pursued, irrespective of sector or geography. In this respect, the integrity of the international aviation system is based on the establishment of limits on the ability of any one country to impact the flying rights of another country. Regrettably the EU Emissions Trading Scheme (ETS) does not currently appear to meet these requirements and the challenge now is for the European Commission to implement ETS in a way that does not distort competition. In the form ETS currently stands, UK Industry is being put at a serious disadvantage by other state’s retaliatory trade measures. This is already impacting the UK’s ability to deliver billions of pounds of its products to certain countries and putting future work and jobs in serious jeopardy. Airbus currently has 45 long range aircraft on hold, equating to a value of $15bn – their order suspended by the Chinese authorities. We strongly urge the Government to press EU authorities on this issue to further prevent the indirect negative effects of ETS on UK exports continuing.

3.3 Local actions have had much less impact on aircraft and aero-engine design. In this respect, design standards set at international level have been significantly more effective in ensuring that the pace of improvement, in environmental and other performance (e.g. safety) areas, has been maintained. The UK Government’s role in the negotiation and development of these at the International Civil Aviation Organisation (ICAO) is fundamental in ensuring that this pace is maintained and that UK industry is not disadvantaged by other nation’s interests.

3.4 An important part to maintaining the UK’s position as a centre of excellence in this high technology sector is the continuing support for technology research and development. This is vital to keeping this important area within the UK, and to avoid it leaking out to other competing countries, where it could then be exploited to the detriment of the UK. It should be recognised that spin-offs from the aerospace industry have been essential in the design, development and manufacture of emerging ‘green’ technologies that hold some of the solutions to the future decarbonisation of human activities. An obvious example is in wind turbine design.

3.5 At a time where there is increasing investment by AgustaWestland in UK Civil Helicopter engineering, matched by a strategic focus from Government, it is important that the Government consider sponsoring an inter-modal transport study to outline the economic and structural benefits of integrating rotary wing aviation into the UK transport system, and determining how these aircraft can play their part in the sustainable growth of aviation.

3.6 SESAR (the Single European Sky Air Traffic Management Research Programme) is an important part of the future of the air traffic management system and a study by McKinsey & Co has shown that delays will hurt European, and in particular UK economies dear. The study anticipates SESAR would benefit the European economy by €419bn (the UK’s share would be €84bn) from 2013 to 2030, creating 328,000 jobs and saving 50 million tonnes of CO2. A 5 year delay would cost Europe €117bn, and a 10 year delay €268bn and 189,000 jobs. UK Government support for this project is therefore vital in ensuring that these benefits are captured and not lost due to a lack of action.

4. Conclusion

4.4 The UK Aerospace sector is a successful, vibrant, high value, high technology engineering, manufacturing and service industry that generates significant returns to all its stakeholders. UK Aerospace is investing in new technologies to reduce its environmental impact whilst working with Government to secure the future of the industry. ADS looks to Government to support industry lead Sustainable Aviation initiatives and press to ensure international emissions standards do not negatively affect UK trade.

19 October 2012